SEB: Solid Asset Quality, Capital Story Unchanged. Spread Neutral.

SEB spreads are around 1bp tighter after results which reflects the lack of meaningful catalysts or surprises here. Equity investors are likely discomfited by weaker revenues – which now seems a theme across the Nordics, a negative lateral for Swedbank results (25-Apr).

• On capital, mgmt indicated it’s running a buffer of 420bp above regulatory minima and its target range is 100-300bp. Under questioning, it seems the intention is to get to the 300bp mark by end-24, which is as per expectations before this, in our view.
• Net interest income (NII) did miss as both deposit spread pressure was seen and volumes remained low, if not negative. Trading profits more than offset this but are always seen as a lower-quality source of revenues. We can see some earnings cuts from this area.
• Asset quality was as good as we felt at first glance earlier and, in fact, mgmt indicated there could be further releases of provisions as Swedish economic indicators, in particular, ticked up from here.